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Business News of Monday, 20 April 2020

Source: goldstreetbusiness.com

ESLA makes GH¢581m debt payment to bondholders


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ESLA Plc. has announced the servicing of its debt to the tune of GH¢581.30 million to holders of ESLA 2024, 2027 and 2029 bonds from the Energy Debt Service Account (DSRA)

A total of about GH¢214.8 million and GH¢267.1 million, representing net interest and withholding statement amount due to Tranche E1 and E2 bondholders respectively, has been transferred from the DSRA Bank to the Paying Bank.

The payment is being made in accordance with the terms of the Bond Prospectus which states that disbursements for repayments will be made from the DSRA by the DSRA Bank to the trust account of the paying bank from the 90th day of the calendar year before any interest Payment Date.

Last year, ESLA made an amendment to decrease the Debt Service Coverage Ratio from 2x to 1.25x under Condition 12.3(c) of the Prospectus, in order to issue GHc 260 million worth of additional bonds for the outstanding energy sector debts.

This meant that the ESLA inflows would only be required to cover one and a quarter times the value of debt servicing obligations to bond holders rather than two times as agreed with bondholders at the time of the offer, which indeed provided the comfort that influenced them to subscribe to the bonds.

By reducing the cover, more ESLA bonds can be issued for the same expected inflows from the levy underpinning their issuance. While the lower debt coverage ratio will have caused some original bond holders some degree of worry, they are however comforted by the fact that ultimately government would stand ready to cover any shortfalls, in order to preserve its credibility.

The statement further indicates that an amount of about GHc 99.250 million has also been transferred from the DSRA Bank to the Paying Bank.

As at March 2020, the ESLA Receivables Account had accrued an amounts of GH¢443.6 million towards servicing the bond programme,

Since its inception, ESLA Plc has issued bonds worth GH¢6.664 billion, from issuances in November 2017 (7-year tranche E1 and 10-year tranche E2), January 2018 (tap of 10-year tranche E2-B), August 2018 (tap of 10-year tranche E2-C) and June 2019 (10-year tranche E3), August (tap of 10-year tranche E2-C) and June 2019 (10-year tranche E3).

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